California Bank of Commerce Posts Third Quarter Record Assets and Earnings
California Bank of Commerce Posts Third Quarter Record Assets and Earnings
LAFAYETTE, Calif.--(BUSINESS WIRE)-- California Bank of Commerce (OTCBB: CABC) reported net income of $744 thousand for the quarter ending September 30, 2013, for a return on average total assets of 0.81%. This represents a 53% increase over the same quarter of 2012. Basic earnings per share of $0.26 compares to $0.17 per share for the same period in 2012. Total assets, loans and deposits also reached new highs for the Bank at the end of the third quarter, 2013.
"We are pleased to report that our loan growth momentum continues along with attracting a record level of non-interest bearing deposits, with the result being an increase in the Bank's net interest margin compared to the same quarter last year. Our book value per common share grew to $9.93," said Terry A. Peterson President and CEO.
Other financial highlights include:
Third Quarter 2013 vs. Third Quarter 2012
Total Assets increased by $34 million to $376 million
Non-interest bearing deposits increased $31 million or 43%, to $104 million
Total Loans increased $32 million or 13%, to $274 million
Total Deposits increased $32 million or 12%, to $306 million
Net Interest Income increased $426 thousand or 15%, to $3.4 million
Net Income increased $258 thousand or 53%, to $744 thousand
Basic Earnings per Common Share increased 56%, to $0.26
Nine Months 2013 vs. Nine Months 2012
Net Interest Income grew by $1.0 million or 12%, to $9.4 million
Net Income increased by $657 thousand or 53%, to $1.9 million
Basic Earnings per Common Share rose 70%, to $0.66
Net Interest Income and Margin
Net interest income increased 15% to $3.4 million for the third quarter ending September 30, 2013 compared to $2.9 million for the same period in 2012. The year over year increase in net interest income was primarily driven by a combination of strong loan growth and a significant increase in non-interest bearing deposits. Average Total Earning Assets increased $29 million or 9% to $349 million for the third quarter 2013 compared to the third quarter 2012.
The Bank's net interest margin improved to 3.82% for the third quarter 2013 compared to 3.65% for the same quarter last year. The improved margin was driven by the growth in loans. Further contributing to the improved net interest margin was a significant increase in non-interest bearing demand deposits which reached a record high for the Bank at $104 million at the end of the third quarter of 2013. Non-interest bearing deposits represented 34% of total deposits at September 30, 2013, another record high for the Bank. "The growth in our non interest bearing deposits funded over 90% of our loan growth, improving our margin and is a strong testament to the commercial relationships we have developed," said Peterson.
Non-Interest Income
Non-interest income was $401 thousand during for the third quarter of 2013 compared to $344 thousand for the same quarter last year. The increase in non-interest income was driven largely by loan fees and increased client treasury management activity.
Non-Interest Expense
Non-interest expense increased by $287 thousand or 14% during the third quarter of 2013 to $2.4 million compared to the same period in 2012. The year over year increase in non-interest expense was due to increased staffing in response to growth in the Bank's client base.
The Bank's efficiency ratio decreased to 63.7% for the third quarter 2013 compared to 64.3% for the same period last year, as increases in quarterly revenue more than offset the higher non-interest expense for the quarter.
Net Income
Net income reached $744 thousand for the third quarter ending September 30, 2013, increasing $258 thousand or 53% compared to the same period in 2012. Net income improved for the quarter due to strong loan growth, funded primarily by non-interest bearing deposits, a lower cost of interest bearing deposits, and stable loan yields. For the first nine months of 2013, net income reached $1.9 million, increasing 53% from the same period in 2012.
The return on average assets was 0.81% during the third quarter of 2013, compared to 0.57% for the same period in 2012. For the first nine months of 2013, the Bank's return on average assets was 0.72% compared 0.53% for the same period last year.
Return on average common equity also improved during the third quarter of 2013, reaching 10.91%, compared to 7.66% for the third quarter of 2012. Year to date ending September 30, 2013, the Bank returned 9.51% on common equity compared to 6.71% for the same period 2012.
Balance Sheet
As of September 30, 2013, total assets were up by $34 million or 10% to $376 million, a record high for the Bank. Total loans grew by $32 million or 13%, reaching a record high $274 million at September 30, 2013, compared to the same period a year ago. Loan growth was driven by an $18 million or 15% increase in commercial and industrial (C&I) loans, while commercial real estate loans grew by $15 million or 14% at September 30, 2013 compared to the same date in 2012. "Our Bank continues to successfully execute its business banking strategy, with a focus on C&I lending (50% of total loans) and an industry leading treasury management team," said Peterson.
Total deposits reached $306 million at September 30, 2013, growing by $32 million over the same period last year, achieving another record for the Bank. Non-interest bearing deposits reached a new high for the Bank at $104 million at September 30, 2013, increasing by $31 million or 43% compared to the same date last year. Non-interest bearing deposits represented 34% of total deposits at the end of the third quarter 2013 compared to 27% at the end of the third quarter 2012.
Credit Quality
The Bank's overall loan quality remains strong and continues to improve. For the third quarter of 2013, total non-performing loans (NPLs) decreased to $3.3 million or 0.89% of total assets at September 30, 2013, compared to $5.2 million and 1.51% at September 30, 2012.
The Bank continues to take a conservative view of the economy and has maintained a strong level of loan reserves to total loans, with a ratio of 1.90% at September 30, 2013 compared to 1.93% of total loans at September 30, 2012.
"We are very pleased with our third quarter results. We continue to attract new clients and retain our existing relationships, improve loan quality, increase revenue, and return improving profits to shareholders," said Peterson.
About California Bank of Commerce
California Bank of Commerce was designed and built to provide a unique banking experience for its clients. The Bank offers a broad range of commercial banking services to closely held businesses and professionals throughout the San Francisco Bay Area. For more information on California Bank of Commerce and our unique banking experience, call us at (925) 283-2265, or visit us at www.californiabankofcommerce.com.
CALIFORNIA BANK OF COMMERCE | |||||||||||||||||||
UNAUDITED SUMMARY FINANCIAL STATEMENTS | |||||||||||||||||||
INCOME STATEMENT | |||||||||||||||||||
($ Thousands) | |||||||||||||||||||
Three Months Ended | Year Over Year Change | ||||||||||||||||||
30-Sep-13 | 30-Jun-13 | 30-Sep-12 | $ | % | |||||||||||||||
Interest income | $ | 3,701 | $ | 3,446 | $ | 3,358 | $ | 343 | 10 | % | |||||||||
Interest expense | (343 | ) | (342 | ) | (426 | ) | 83 | -19 | % | ||||||||||
Net interest income before provision | 3,358 | 3,104 | 2,932 | 426 | 15 | % | |||||||||||||
Provision to the Loan Loss Reserve | (79 | ) | (58 | ) | (312 | ) | 233 | -75 | % | ||||||||||
Net interest income after provision | $ | 3,279 | $ | 3,046 | $ | 2,620 | $ | 659 | 25 | % | |||||||||
Non-interest income | 401 | 290 | 344 | 57 | 17 | % | |||||||||||||
Non-interest expense | (2,394 | ) | (2,297 | ) | (2,107 | ) | (287 | ) | 14 | % | |||||||||
Income before tax provision | 1,286 | 1,039 | 857 | 429 | 50 | % | |||||||||||||
Provision for income taxes | (542 | ) | (442 | ) | (371 | ) | (171 | ) | 46 | % | |||||||||
Net income | $ | 744 | $ | 597 | $ | 486 | $ | 258 | 53 | % | |||||||||
Preferred Dividends | 28 | 28 | 28 | - | 0 | % | |||||||||||||
Income to Common Shareholders | $ | 716 | $ | 569 | $ | 458 | $ | 258 | 56 | % | |||||||||
Basic Earnings per Common share | $ | 0.260 | $ | 0.207 | $ | 0.167 | $ | 0.093 | 56 | % | |||||||||
Weighted Average Shares Outstanding | 2,757,960 | 2,757,243 | 2,750,000 | ||||||||||||||||
Return on Average Assets | 0.81 | % | 0.71 | % | 0.57 | % | |||||||||||||
Return on Average Common Equity | 10.91 | % | 8.97 | % | 7.66 | % | |||||||||||||
Non Interest Expense to Average Total Assets | 2.60 | % | 2.73 | % | 2.49 | % | |||||||||||||
Efficiency Ratio | 63.7 | % | 67.7 | % | 64.3 | % | |||||||||||||
CALIFORNIA BANK OF COMMERCE | |||||||||||||||
UNAUDITED SUMMARY FINANCIAL STATEMENTS | |||||||||||||||
INCOME STATEMENT | |||||||||||||||
($ Thousands) | |||||||||||||||
Nine Months Ended | Year Over Year Change | ||||||||||||||
30-Sep-13 | 30-Sep-12 | $ | % | ||||||||||||
Interest income | $ | 10,511 | $ | 9,626 | $ | 885 | 9 | % | |||||||
Interest expense | (1,065 | ) | (1,208 | ) | 143 | -12 | % | ||||||||
Net interest income before provision | 9,446 | 8,418 | 1,028 | 12 | % | ||||||||||
Provision to the Loan Loss Reserve | (348 | ) | (1,000 | ) | 652 | -65 | % | ||||||||
Net interest income after provision | $ | 9,098 | $ | 7,418 | $ | 1,680 | 23 | % | |||||||
Non-interest income | 1,040 | 1,156 | (116 | ) | -10 | % | |||||||||
Non-interest expense | (7,029 | ) | (6,384 | ) | (645 | ) | 10 | % | |||||||
Income before tax provision | 3,109 | 2,190 | 919 | 42 | % | ||||||||||
Provision for income taxes | (1,214 | ) | (952 | ) | (262 | ) | 28 | % | |||||||
Net income | $ | 1,895 | $ | 1,238 | $ | 657 | 53 | % | |||||||
Preferred Dividends | 84 | 175 | (91 | ) | -52 | % | |||||||||
Income to Common Shareholders | $ | 1,811 | $ | 1,063 | $ | 748 | 70 | % | |||||||
Basic Earnings per Common share | $ | 0.657 | $ | 0.387 | $ | 0.270 | 70 | % | |||||||
Weighted Average Shares Outstanding | 2,757,485 | 2,750,000 | 7,485 | 0 | % | ||||||||||
Return on Average Assets | 0.72 | % | 0.53 | % | |||||||||||
Return on Average Common Equity | 9.51 | % | 6.71 | % | |||||||||||
Non Interest Expense to Average Total Assets | 2.69 | % | 2.71 | % | |||||||||||
Efficiency Ratio | 67.0 | % | 66.7 | % | |||||||||||
Core Non Interest Income to Average Assets | 0.39 | % | 0.33 | % | |||||||||||
Net Gains from Asset Sales to Average Assets | 0.01 | % | 0.16 | % | |||||||||||
Total Non Interest Income to Average Assets | 0.40 | % | 0.49 | % | |||||||||||
CALIFORNIA BANK OF COMMERCE | |||||||||||||||||||
UNAUDITED SUMMARY FINANCIAL STATEMENTS | |||||||||||||||||||
BALANCE SHEET | |||||||||||||||||||
($ Thousands) | |||||||||||||||||||
Year Over Year Change | |||||||||||||||||||
Assets | 30-Sep-13 | 30-Jun-13 | 30-Sep-12 | $ | % | ||||||||||||||
Total Cash and Investments | $ | 94,562 | $ | 83,149 | $ | 92,598 | $ | 1,964 | 2 | % | |||||||||
Loans, net of deferred costs/fees | 274,124 | 258,963 | 241,755 | $ | 32,369 | 13 | % | ||||||||||||
Loan Loss Reserve | (5,200 | ) | (4,970 | ) | (4,650 | ) | $ | 550 | 12 | % | |||||||||
Other | 12,047 | 12,035 | 11,745 | $ | 302 | 3 | % | ||||||||||||
Total Assets | $ | 375,533 | $ | 349,177 | $ | 341,448 | $ | 34,085 | 10 | % | |||||||||
Liabilities & Shareholders' Equity | |||||||||||||||||||
Non-interest Bearing Deposits | $ | 104,319 | $ | 89,518 | $ | 73,163 | $ | 31,156 | 43 | % | |||||||||
Interest Bearing Deposits | |||||||||||||||||||
